Another blow from the budget to the farming community who rely on these vehicles for their regular work, following a Court of Appeal judgement, the government is to treat double cab pick-up vehicles (DCPUs) with a payload of one tonne or more as cars for certain tax purposes.
From 1st April 2025 for Corporation Tax, and 6th April 2025 for income tax, DCPUs will be treated as cars for the purposes of capital allowances, benefits in kind, and some deductions from business profits.
The existing capital allowances treatment will apply to those who purchase DCPUs before April 2025.
Transitional benefit in kind arrangements will apply for employers that have purchased, leased, or ordered a DCPU before 6 April 2025. They will be able to use the previous treatment, until the earlier of disposal, lease expiry, or 5 April 2029.
Amended HMRC guidance clarifies this change of approach and how it is to be implemented, including transitional arrangements, for capital allowances (CA23510 and CA23511), benefits in kind (EIM23150 and EIM23151) and business profits (BIM47730 and BIM70035).
What is a double cab pickup?
A vehicle of this sort normally has:
- a front passenger cab that contains a second row of seats and is capable of seating about 4 passengers, plus the driver
- four doors capable of being opened independently, whether the rear doors are hinged at the front or the rear (two door versions are normally accepted to be vans) and
- an uncovered pickup area behind the passenger cab.
Who would this change have hurt the most?
So the tax status of many of these vehicles would have changed as now there is an assumption of private use and where former classifications may have seen these treated as Vans in alignment with VAT treatment, now employees with the use of these vehicles will see many of them being classified as company cars
It was identified that this change would have adversely affected the farming industry and others where such off road capable vehicles are seen as essential with limited alternates.
However, others were seen as benefiting from from a van classification for in effect was a company car that would have otherwise attracted higher tax liabilities.
There will be a variety of outspoken challenges, farmers are not overly feeling loved by this government.
PAYadvice.UK 8/11/2025